Prosecutors have raided Deutsche Bank’s headquarters in Frankfurt this week after suspicions of tax fraud relating to client securities transactions surfaced. The Financial Times reports that about 30 plain-clothes officers were part of the search, which began on Tuesday morning.
The alleged transactions involved “dividend stripping,” a strategy used to reduce tax burdens, where an investor obtains tax free dividends by investing in securities during a specific time to incur a short-term capital loss. In recent years, Germany has made significant moves to crackdown on tax evasion schemes by working with U.S. and Swiss authorities—while this loophole is now closed, significant legal issues still exist.
